The Sarbanes-Oxley Act

This memorandum discusses a brief history of Pat, his wrongdoings and related action, and the response by the related law enforcement agencies.

The Sarbanes-Oxley Act of 2002 was created in reaction to the increasing number of accounting fraud scandals in the late nineties and early 2000 's. One example of an accounting scandal that occurred was Enron. Andrew Fastow, the CFO at the time, created phony partnerships and companies, keeping separate books for these companies. He convinced some of the major banks to invest in these companies. The Vice-President at the time, Sharon Watkins, discovered these fraudulent accounting treatments, effectively becoming a whistleblower. The fraud at Enron also caused the end of the accounting firm Arthur Anderson, which was the firm that audited the financial statements of Enron. Sarbanes-Oxley no longer allows top executives to place blame on other employees, as they are now required to sign-off on all financial statements, meaning the executives agree with all accounting treatments.

Additionally, internal control processes are established to assist officials in safeguarding processes through regulation, documentation, recording, reconciling, and reporting their actions.

This chart from the site “Chaos of Business” shows the large decline of the Enron stock when it was being investigated by the Securities and Exchange Commission. People who had shares of the stock had lost almost all of their money they invested into the company. This chart shows that the share price dropped from $84 per share to $0.01 per share in about ten months. It seems like not a big deal, but in reality people usually buy hundreds of shares in a company, so that loss of $84 can calculate to about $25,200 if a person has 300 shares lost. This chart shows how quickly the money was lost and how badly it affected the people who owned shares of Enron.

Bullseye, a publicly traded company and general merchandise retailer based out of Minneapolis, MN, is one of our firms most prestigious clients. I, Jennifer Gore, have just been informed that I will be leading a team of four other accountants to perform the 2016 integrated audit. One of whom is an IT expert and will bring valuable insight into the technology side of the audit. This audit is a continuation from previous years’ audits and anticipate that things will run smoothly barring any new revelations that we find within the audit itself. Per the Sarbanes-Oxley Act of 2002 (SOX), all publicly traded companies need to have an integrated audit that consists of the Financial Statement audit as well as the Internal Control of Financial Reporting (ICFR) audit (Hooks, 2011, pg. 36). There are several sections to the plan of this integrated audit and they include:

There are several procedures that should be considered when implementing internal controls for your business. There should be a segregation of duties between different individuals to lessen the threat of

Controlling is monitoring the performance of the organization, identifying deviations between planned and actual results, and taking corrective action when necessary. With all these four functions that are involved in the process of management, if all are followed correctly the organization will be properly ran and will have few complications.

Each of the five components of an internal control system is important. Let us focus on the control activities. These activities are the backbone of the company’s efforts to address the risks it faces, such as fraud. The specific control activities used by a company will vary depending on management’s assessments of the risks faced. The six principles of control activities are as follows:

Controlling is a process of monitoring performance and taking action to ensure desired results. It sees to it that the right steps happen, in the right order, and at the right time frame. Controlling represents a very important function of management. When done well, it ensures that the overall directions of individuals and groups are consistent with short and long term plans. It helps ensure that objectives and accomplishments are consistent with one another throughout an organization. During this Session Long Project I will discuss the key organizational efforts that are among the most useful or important in my organization FLELOGSUPPRON Three Zero (VRC-30) to assure control of important organizational processes?

Controlling Process in Management Controlling is directly related to planning. The controlling process ensures that plans are being implemented properly. In the functions of management cycle - planning, organizing, directing, and controlling - planning moves forward into all the other functions, and controlling reaches back. Controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle. Control is the process through which standards for performance of people and processes are set, communicated, and applied.

Controls are measuring sticks to see if the desired goals are being met. Successful managers create parameters for their employees and implement controls within a criteria to confirm if the job is being done to standard. Case in point, I give quarterly performance counseling’s to each subordinate in my department on performance, being efficient at the job and using problem solving techniques. Controls to an extent border along the lines of micromanaging, but it can also be used to emphasize how well the subordinate is doing too. All quarterly counseling’s are not corrective in nature, but it is a great assessment tool for exceptional job performance as well. The usage of controls is part of my responsibility as a supervisor to ensure the goals are being achieved to standard.

Standards are criteria against which results are measured. They are norms to achieve the goals. Standards are usually measured in terms of output. They can also be measured in non-monetary terms like loyalty, customer attraction, goodwill etc. Some of the standards are as.

A company performs many processes to reach management and shareholder objectives for performance. The control processes of the firm are in place to minimize risks and monitor the processes that result in final financial statement figures. The following is a list and description of the 10 controls that we have identified as being currently used in the Athens, Ohio Wendy’s location.

Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions.

Internal control is designed to provide reasonable assurance that the entity\s general objectives are being achieved. Therefore clear objectives are a prerequisite for an effective internal control process.